Coffee futures on ICE firmed on Thursday, buoyed by demand for certified stocks and investor buying, while raw sugar rose in technically driven dealings, and on concerns over supply. Cocoa inched lower on investor selling, but was underpinned by concerns over prospects for West African mid-crops. In coffee, traders spoke of expectations that the pace of drawdowns of certified stocks from warehouses would quicken in 2016 as the premium for buying from producers rises and age penalties are applied to older inventory.
"Futures prices are a reflection of certified coffee demand," one broker said. March arabicas were up 1.6 cent, or 1.3 percent, at $1.2315 per lb at 1447 GMT, while March robustas were up $27, or 1.9 percent, at $1,429 per tonne.
"On the upside, additional appetite for prices around the current area could see resistance towards the 40-day moving average at $1,468 tested," Sucden Financial Research said in a note. A Reuters survey of 13 traders and analysts showed that coffee bulls should not expect the first deficit in six years to usher in a return to the days of $2-a-pound arabica prices.
Sugar futures rose, supported by reports of drought in sugar growing areas in India, the second biggest producer after Brazil, and by a shift of the global market into deficit in 2015/16 after years of surpluses. One European trade source said the slide in raw sugar futures to a four-month low earlier this week had spurred physical enquiries. "It seems that China could be currently sounding out the cash market," the source said.
March raw sugar was up 0.09 cents, or 0.7 percent, at 12.98 cents per lb, having fallen on Tuesday to a low of 12.66 cents. March white sugar futures were down $5.00, or 1.25 percent, at $394.40 per tonne. Raw sugar prices are poised to jump by more than a quarter by the end of 2016, notching a second year of gains as a supply deficit emerges and persists during the next two years, according to a Reuters survey of 15 analysts and traders. March New York cocoa was down $19, or 0.7 percent, at $2,818 per tonne. March London cocoa was down 9 pounds, or 0.45 percent, at 2,006 pounds per tonne. Exporters and analysts said the Harmattan desert wind could cut the Ivorian mid-crop by up to 200,000 tonnes.